The New Entrepreneurs don’t need no stinkin venture money

In my role as a Bootstrap-Austin subgroup leader I am consistently immersed in entrepreneurial issues at the grassroots level. I love it. I am always fascinated by the journey nearly all start-ups go through. The soul-searching,  the freedom, the riches! …Er, ok… the freedom!

Entrepreneurs look a bit different these days. They are more practical. And typically more creative than they are technical. 10 years ago, for instance, it wasn’t uncommon for two engineers to hit on an idea and build a new system, then go try to find venture money to scale it, hoping to eventually take the company public and of course, become gazillionaires. 

But it didn’t quite work out that way for most of us start-up guys back then. Assuming you could build a solid product, land institutional funding multiple times, with few mistakes, there was still that prickly revenue problem. Even if you brought in a few customers, chances were by the time any exit ever happened your equity had dwindled sharply. Not exactly a yellow brick road to Richistan…

Take a look at all the Austin venture-funded companies for the last 10 years –you will find few relatively few founders who became extremely wealthy by selling their company in the end. Yet a sale is what generally happens to the more successful venture-funded companies, if they’re lucky.

It seems that the shakeout that followed those times has created a new and improved entrepreneur, one who understands the market limits of cool technology, the perils (and scarcity) of venture funding, and the idea that not all companies must go public to achieve sustained success.

A common characteristic among these entrepreneurs is humility – they see a business need, figure out how to tackle it, build a demo, get a few customers to take a chance on them, and grow organically. Venture money, even if it were available, would likely corrupt the journey and actually become a journey in itself, always focusing on the next round rather than on customers and products. These are cornerstones of the Bootstrap ethos, which I encourage any budding entrepreneur to check out. 

With technology as easily accessed as it is now, the costs of developing products has declined, which means creative, non-technical entrepreneurs can look past technology, and funding, and zero in on customer pain.